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The problem seems from stem from the fact that if NVDA disclosed that crypto amounted to 5% of their market when instead it's 5 times as much (random numbers fo

The problem seems from stem from the fact that if NVDA disclosed that crypto amounted to 5% of their market when instead it's 5 times as much (random numbers for the sake of the example), investors are bound to suffer more in case of a crypto market crash, because the crypto exposure is much higher than what was disclosed by the company.

mbesto 4y ago
> investors are bound to suffer more in case of a crypto market crash Do we know that actually? There was already outsized demand (demand > supply) for Nvdia GPUs to the extent that consumers literally couldn't buy GPUs for ~2 years (still is a problem) without buying from a scalper. A few things to consider: (1) In most markets where demand outpaces supply, new entrants emerge. That is almost impossible to do in GPUs due to compatibility/support. So we've had pent up demand in that market. (2) Consumers waited for supply to catch up to make the purchase even though they were ready to purchase. (3) AFAIK there was no surcharge implemented by NVDA and this value was captured by scalpers. In fact, the price for performance ratio for the latest series of NVDA GPUs was so good that even if crypto wasn't a thing many consumers were ready to replace their old GPU. (4) Crypto focused demand is a leading indicator of sales for that channel. With the shift to PoS, the overall demand for crypto rigs could shutter overnight. My theory (as an NVDA investor) is that sales wouldn't falter because they were already selling products as fast as physically possible due to supply constraints. The question then therefore is what is the forecast 2-5 years out? NVDA is IMO heavily diversified in markets that have long term plays that easily could substitute any dip in consumer GPUs due to less demand from crypto. TL;DR - I think people are overthinking this and if you don't have any idea of how to calculate what a meaningful penalty should be (i.e. "well the company was set to gain X amount of profit due to their infraction") then it's hard for me to take the argument seriously that $5M "isn't enough".

mbesto 4y ago

> investors are bound to suffer more in case of a crypto market crash Do we know that actually? There was already outsized demand (demand > supply) for Nvdia GPUs to the extent that consumers literally couldn't buy GPUs for ~2 years (still is a problem) without buying from a scalper. A few things to consider: (1) In most markets where demand outpaces supply, new entrants emerge. That is almost impossible to do in GPUs due to compatibility/support. So we've had pent up demand in that market. (2) Consumers waited for supply to catch up to make the purchase even though they were ready to purchase. (3) AFAIK there was no surcharge implemented by NVDA and this value was captured by scalpers. In fact, the price for performance ratio for the latest series of NVDA GPUs was so good that even if crypto wasn't a thing many consumers were ready to replace their old GPU. (4) Crypto focused demand is a leading indicator of sales for that channel. With the shift to PoS, the overall demand for crypto rigs could shutter overnight. My theory (as an NVDA investor) is that sales wouldn't falter because they were already selling products as fast as physically possible due to supply constraints. The question then therefore is what is the forecast 2-5 years out? NVDA is IMO heavily diversified in markets that have long term plays that easily could substitute any dip in consumer GPUs due to less demand from crypto. TL;DR - I think people are overthinking this and if you don't have any idea of how to calculate what a meaningful penalty should be (i.e. "well the company was set to gain X amount of profit due to their infraction") then it's hard for me to take the argument seriously that $5M "isn't enough".